Sixty-eight percent of 60 economists said the Fed chairman’s third round of quantitative easing will last until late next year or beyond. Just 51 percent of them said the strategy will help boost employment, with a median estimate of 116,000 jobs over the course of next year.Read: China Industry Gauge Rises as Easing Prospects Abate“The recovery in the labor market is probably going to be more sluggish than the Fed recognizes” said Michael Hanson, senior U.S. economist at Bank of America Corp. in New York and a former Fed economist. He said policy makers have “painted themselves in a bit of a corner, waiting to see a significant improvement in the labor market.”Bernanke said in August that new bond buying, while spurring growth and generating jobs, may erode confidence the Fed will exit smoothly from record accommodation, including the first two rounds of bond purchases totaling $2.3 trillion. Most surveyed economists believe Bernanke has gone too far with quantitative easing, with 55 percent saying policy is too easy, compared with 48 percent who said so in a Sept. 7-10 survey.Bernanke and his colleagues on the Federal Open Market Committee resumed a two-day meeting in Washington today and plan to release a statement at about 2:15 p.m. on policy, including their current plan to buy $40 billion in mortgage-backed securities each month for an indefinite period.
Skills Atrophy
By not buying bonds, the Fed would increase the risk of “structural damage” to the economy as skills atrophy among workers facing long-term unemployment, Bernanke said on Aug. 31.More than 4.8 million Americans have been out of work for six months or more, Labor Department data show. Bernanke said in the August speech in Jackson Hole, Wyoming, that the first two rounds of quantitative easing generated 2 million jobs.The Fed started its third round of easing even as it continued Operation Twist, a program to lengthen the maturities of the assets already on its balance sheet by swapping about $45 billion a month of short-term debt and buying the same amount of longer-term Treasury securities.That program is due to end in December. Seventy-two percent of the economists said the Fed in January will make up for the end of Operation Twist with monthly purchases of as much as $45 billion in Treasury securities in addition to the mortgage-bond buying. The central bank may wait for their Dec. 11-12 meeting before deciding what to do after Operation Twist.Dealer Survey
Dealers that trade directly with the Fed also expect the central bank to continue buying Treasuries after Operation Twist ends, according to a separate Bloomberg survey.“The odds are slightly tilted in favor of them adding further Treasury purchases after Twist is done,” said Michael Feroli, chief U.S. economist at New York-based JPMorgan Chase & Co. and a former researcher for the Fed Board in Washington. “I don’t think we’ll have seen enough improvement for them to be satisfied, and if there are fiscal headwinds coming next year they’ll want to provide some extra accommodation.”Economic output would shrink by 0.5 percent next year, and joblessness climb to about 9 percent if the so-called fiscal cliff isn’t averted, according to the Congressional Budget Office. The term refers to $607 billion in U.S. federal spending cuts and tax increases scheduled to take effect in January unless Congress acts.Growth Slowdown
http://www.bloomberg.com/news/2012-10-24/bernanke-seen-attacking-jobless-rate-with-qe-until-his-term-ends.htmlFacebook Shares Soar After Beating Estimates on Mobile
Facebook Inc. (FB), the biggest social networking site, posted a record surge after reporting sales that topped analysts’ estimates, allaying concerns over its ability to make money from mobile ads.Enlarge image
Ads delivered to people on mobile devices generated about $150 million during the quarter, or 14 percent of all advertising revenue. Photographer: Jason Alden/Bloomberg
7:17Oct. 24 (Bloomberg) -- Martin Garner, an analyst at CCS Insight, discusses Apple Inc.'s 7.9-inch iPad mini and possible commercial transactions via Facebook Inc. He talks with Manus Cranny on Bloomberg Television's "The Pulse." (Source: Bloomberg)Facebook advanced 23 percent to $23.94 at 9:36 a.m. in New York. Through yesterday, the stock had fallen 49 percent since an initial public offering in May.Ads delivered to people on mobile devices generated about $150 million during the quarter, or 14 percent of all advertising revenue. That compares with about $10 million in the second quarter, according to an estimate by Brian Wieser, an analyst at Pivotal Research Group. Chief Executive Officer Mark Zuckerberg is showing early success with the more than a half dozen services unveiled since March that are designed to help businesses woo social-network users on tablets and smartphones.“Mobile problem? What mobile problem?” Wieser said. “It’s nothing short of remarkable.”Sales rose 32 percent to $1.26 billion during the third quarter,Menlo Park, California-based Facebook said yesterday in a statement. That compares with the average estimate of $1.23 billion, according to data compiled by Bloomberg. That also matched the growth rate of the second quarter, snapping a streak of slowing sales increases.Profit excluding costs such as stock-based compensation and related payroll taxes was 12 cents a share in the third quarter. That compares with the average estimate of 11 cents a share.Facebook had a net loss of $59 million, or 2 cents a share, compared with profit of $227 million, or 10 cents, reflecting a larger provision for income taxes.Moving ‘Quickly’http://www.bloomberg.com/news/2012-10-24/facebook-shares-soar-after-beating-estimates-on-mobile-gains.html
Thoughts on Roman Circuses (and ours)
BY MIKE ENDRESFrom history, we can glean more than just the bare facts of the decline and fall of the Roman Empire. First, one has to understand that before Rome slowly toppled into dust, it was a very prosperous place. There was distinct upper, middle, lower and slave classes and, all in all, there was more than enough to eat and time to spare for numerous sports. Also, the Roman Legions were the largest and strongest, best trained and fed, best equipped with hardware aplenty of any nation-state-empire in the world at that time. Very similar, in fact to the U.S.A. (less a lot of technology).
Like all civilizations, once in a position of being fairly rich, having food aplenty and the good life, the better classes of Roman citizens got bored with it all. I mean how often can you discuss the latest conquest of some unknown and barbaric place, long removed from Rome or a new and flavorsome dish imported for some outpost of the Empire, or the latest dalliance of the current Emperor with some Egyptian babe.So, what to do. A bored lower, middle and upper class of citizens tend to get into mischief when not productively employed and, with having slaves in good supply, can afford a minimal workload. As time progressed and the spoils of Empire Building and Conquering, Inc. flowed into Imperial Rome, there was a natural impulse on the part of the ruling elite to pass along a bit more of the spoils to the populous lest they become jealous or perhaps a bit rowdy at the obvious top-heavy distribution of the goodies. The elites lived very well in Imperial Rome. But food and trinkets will stretch only so far—ah, what to do after you've eaten your fill, tummy full and had a nap? Well, you play, that's what. You need something to fill those idle full-stomached hours and so the elite once again come to the rescue.Let's have some circuses come to town. Starting out with traveling entertainment groups, shows were put on of many sorts from dancing and singing to - ah - traveling trollops who entertained in their own inimitable way.http://www.financialsense.com/contributors/mike-endres/america-us-roman-circusesAnd another thing. We've got plenty of captured enemy soldiers, why don't we built a pit, toss a few into it - well armed with, perhaps, some novel weapons like nets and forks and cudgels and see who comes out alive! What a wonderful idea. While we're at it, there are a few pesky Christians we have to house and feed, perhaps they might like to play with some of those marvelous feline creatures our Legions have captured and sent back from places afar. We'll starve the kitties for a few days, put a small group of trouble making religious bigots into the pit and see if they can play with a hungry cat or two. Such fun!The smell of blood, guts and glory in the afternoon would be just the thing to entertain those bored citizens and keep their mind off the fact that we (the elite) are robbing them blind while doling out just enough for the lesser classes to keep them quiet, satiated and out of trouble.And so the grand Colosseum and other assorted playgrounds were constructed to provide a location for circuses while markets were built to provide free food and handouts to those of lower wealth and standing.
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